|
|
|
|
|
|
|
How Much Is Too Much? With Life Insurance, The Right Amount Is A Relative Thing. by Cris Prystay The Asian Wall Street Journal
Chances are you have been told at least once that its impossible to have too much life-insurance coverage. That's an exaggeration, of course. But the issue's murkier than you might think.
Consider these 2 scenarios: Peter Zheng has a pair of policies with a combined $295,000 in coverage. He describes himself as cautious. If Mr Zheng is cautious, then Jeni Chen is arch-conservative. The Singaporean entrepreneur has 14 policies worth some $1.2 million.
What a suitable amount of insurance for you? Not a simple questions but some advisers offer one possible set of guidelines. Add any debts that will fall to your survivors, including unpaid mortgage and then tack on from 5 to 10 years' worth of your salary, depending on how much cushion you want to provide.
Another way to do it: decide how much money you'd like to leave on your dependents each year. Advisors say that "replacement income", as it's known, should be about 65% of your income. (So if you earn $100,000, you'd want to leave about 65% of your current income.) Now divide the replacement income by a likely interest rate, say 5%. The upshot? You'd need a $1.3 million policy.
Life Insurance: Don't trash that policy. By Tim Morrison Time Money (April 1998)
In the current economic crisis, many asians are finding it harder to afford the life insurance they need. If you're worried about paying yours, don't cancel your policy yet: There are ways to cut your costs down. And if your policy has accumulated cash you've been keeping against a rainy day, guess what: it's raining. You can use those savings now to stay afloat in the low spots.
Copyright 2002. © BCBuddy.com. All rights reserved. Legal Restrictions |
